Monday, January 19, 2009

Pricing Your Products for Online Selling

Let's face it folks, a lot of you are "in business" because of the love of your craft, art, or design. In order to obtain exposure for your creative pieces, you have decided to sell things online, and boom...you are in business.

Along with the joy of creating are things that you have to do for the business end of the deal. We all struggle with the business aspect of things that must be done if we are to continue to create and sell. Pricing is one of those confusing topics. I see pricing in selling venues for like items that go from the ridiculous to the sublime. It can be confusing to a buyer to see like items with such a wide range of pricing and it shows that someone is not being realistic.

One pricing guide, Pricing Your Handmade Jewelry, impressed me the most with the details of pricing and is a resource guide from The Beading Emporium by Ebay powerseller cloudninecat. The guide uses jewelry as examples but you can easily translate the process to any product you may sell.

From a strategic standpoint, did you know that your pricing becomes a part of your branding? Are you known for inexpensive items, expensive items or moderately priced items? This is a part of "who you are and what you do," and how you position your products, your business, and yourself as an artist.

As you read resources and mull over where you fit, here are a few things to think about relative to your pricing:

Know the actual cost of materials in a piece

Know your annual operational costs (utilities, equipment, rent, etc..., so you can assign a percentage to each item)

Assign a labor cost for your work (some start out at $8-$10/hr and work up as they become more known and proficient)

Select a pricing formula that best suits your business in the moment - your pricing needs may change as time goes on - be flexible and fluid (be conservative if you are new to the craft)

Keep in mind wholesale pricing for inquiries (don't price your goods so low that you cannot give any discount for wholesale. You may not want to wholesale at this time, but you never know if you will want to in the future - now is the time to be proactive and prepare)

Research your product's competitors - it is very important to understand the market in which you are entering and what your competitors are charging for like items

Research what has sold online that are similar items to yours - research frequency of sales and the prices, if available

Understand your selling venue audience - some target those who spend a lower amount, others target a more affluent audience*

Above all, once you work through this entire process and come up with a retail price, be realistic with what the market will bear (you may have to back down your retail pricing on an item if it is "priced out of the market," and this goes back to the importance of buying raw materials at the lowest cost)

*A note about your choice of selling venues: each venue targets a different type of buyer or audience. It is important for you to know what that is in terms of affluence, average price of sales, and the aesthetics appreciated from the buyer. See Indie CEO's post on selecting the right selling venue as a good resource to help you research these things.

3 comments:

Thanks for linking my post - I am writing a series on "crafting for profit" - the first post was on Business Plans, the second about getting your money organized, and the most recent was about pricing...more to come!! Love your blog!!! Linking now! :)

Researching how to price handcrafted jewelry was the first thing I did when I decided I was going to take a stab at selling mine. cloudninecat's article was one of the articles I read during the course of my research.

I wish more indie artists would research how to price their goods. I've seen so many things that are so woefully underpriced I gotta wonder why those who make them don't just give them away.

This is a great post. Am marking/following so can come back and keep checking to make sure I'm getting it right and check up on the other great advice you've got set out here. Thanks.http://KayzKreationz.etsy.comhttp://KayzKreationz.blogspot.com

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About Me

Hi Everyone! I am a long-time independent marketing communications consultant for small businesses, a self-representing jewelry designer, and entrepreneur! GalleriaLinda is my jewelry business brand that includes contemporary handcrafted beaded and sterling wire jewelry, vintage jewelry, and beads.
IndieCEO.blogspot.com is dedicated to all of you who are CEOs of your own independent business and is focused on the Indie Arts community.
GalleriaLindaShowcase.blogspot.com is my jewelry blog that gives a peek into the thoughts and studio of GalleriaLinda!